Int J Urban Regional Res - 2020 - Grubbauer - Assisted Self Help Housing in Mexico Advocacy Micro Finance and The Making

INTERNATIONAL JOURNAL OF URBAN AND REGIONAL RESEARCH 947
DOI:10.1111/1468-2427.12916
— ASSISTED SELF-HELP HOUSING IN MEXICO:

Advocacy, (Micro)Finance and the Making of Markets
Monika Grubbauer
Abstract
This article examines forms of housing finance that offer poor households
opportunities for sourcing resources for construction work through non-mortgage
microloans. In Mexico, these housing microfinance schemes have recently been incorporated
into national housing policies. On a global level, the past 10 to 15 years have seen the
emergence of institutional investment in microfinance. I reflect on these processes in this
article by bringing critical accounts of financial inclusion in development studies and
the debate on financialization within urban studies and beyond into dialogue. I combine
micro- and macro-scale perspectives to examine how households become financial clients
and how finance gains influence by expanding capitalist markets into the informal housing
sector. This discussion is based on policy review and document analyses and an empirically
grounded account of an assisted self-help housing case study. In the article I draw on
three focal concepts––risk, debt and marketization––to highlight the ambivalences of the
expanded access to finance for poor households engaged in self-organized building practices.
These ambivalences emerge from the multiplicity of operational logics and motivations in
the field of housing provision for the poor, and the profoundly conflicting rationalities of
financial- and social-sector actors.
Introduction
Financialization processes have received broad attention in urban studies over
the past decade, particularly in the wake of the 2008 financial crisis. Housing has
come to exemplify how these processes have begun affecting the urban arena (Fields
and Uffer, 2014) and illustrate the reach of financial markets into everyday life
(Rolnik, 2013; Palomera, 2014). In this article I seek to bring the literature on
financialization within urban studies into conversation with critical development
studies by examining the role of finance in the provision of housing in low- and
middle-income countries. In these countries, low, insecure and irregular incomes,
coupled with a lack of access to formal credit, have historically led urban dwellers to
resort to self-organized, incremental and long-term building processes. Over the past
two decades, new forms of housing finance have emerged that offer self-help builders
alternatives to sourcing financial resources through informal networks. These new
forms include community-based finance savings-and-loan groups (Mitlin et al., 2018),
and market-based forms of non-mortgage housing-finance provision for low-income
groups––what has been termed housing microfinance (Merrill, 2012). A more recent
phenomenon is that national housing policies, particularly in the Latin American
context, and global development agendas seek to incorporate these non-mortgage
microcredit schemes into programmes aimed at upgrading existing self-help housing
stock (Bredenoord and Cabrera, 2014; Grubbauer, 2019). This expansion is in line
with the new agenda of financial inclusion in mainstream development policy, which
I am grateful to Susanne Soederberg and the three anonymous IJURR reviewers for their helpful comments
and suggestions on earlier versions of the article. I also acknowledge the valuable support of Luisa Escobar in
conducting parts of the interviews and jointly organizing the field trip in 2019. Research for this article was funded
with grants from the German Academic Exchange Service (DAAD) and the German Research Foundation (DFG).
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs
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is non-commercial and no modifications or adaptations are made. Open access funding enabled and organized
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© 2020 the authors. International Journal of Urban and Regional Research published by John Wiley & Sons Ltd
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GRUBBAUER948
is expanding earlier microfinance schemes to push for private-sector-led development,

open up space for new financial actors, and position access to finance as a key element
of social inclusion (Soederberg, 2013; Mader, 2017), contributing to what has been
described as the ‘acceleration and deepening of the financialization–development
nexus’ (Mawdsley, 2018: 265).
In this article I examine the case of Mexico’s state-led attempts to expand access
to finance to low-income groups for self-construction of housing and work on existing
self-built homes beyond conventional mortgage finance. In Mexico, such approaches,
facilitated through programmes set up by the National Housing Commission (Comisión
Nacional De Vivienda, or CONAVI) in cooperation with the Federal Mortgage Company
(Sociedad Hipotecaria Federal, or SHF), have been very visible over the past decade. In
2006, the new Housing Law first recognized incremental building as a legitimate housing
strategy. Since 2006, the SHF, as an intermediary lending institution, has supported
the improvement of existing self-built homes on the basis of minor interventions
through its housing microcredit fund (SHF, 2019a) and since 2011 it has supported more
extensive remodelling in the form of extensions and structural work through its assisted
self-help housing fund (SHF, 2019b). Loans from these funds can be combined with
capital subsidies from CONAVI or other state and municipal programmes. Borrowers
within the SHF’s assisted self-help housing scheme are required to work with an SHF-
registered enterprise (Agencia Productora de Vivienda,1 or APV) that supervises the
remodelling project, while the financial intermediary manages credit allocation and
repayment. As a whole, this model, which was initiated in 2006, had its ups and downs,
but was operational from 2007 to 2012, politically supported by the socially oriented
APVs organized in the Comité de Producción Social de Vivienda (Committee for Social
Production of Housing) (CPSV, 2012). In 2012, following the election of president Peña
Nieto and senior-level changes in the SHF and CONAVI, APVs were barred from these
programmes. After protests and political negotiations, the programmes continued, but
with a stronger emphasis on involving for-profit financial agents. At present, leftist
president López Obrador, who has been in office since December 2018, is actively
seeking the advice of the socially oriented APVs and other actors affiliated with the
CPSV. Reportedly, his intention is to scale up low-income housing programmes by
further flexibilizing existing microcredit schemes and reinforcing the involvement of
for-profit actors.
The aim of this article is to expose the financial mechanisms of these new
schemes and reflect on their institutional arrangements, the actors and instruments
involved, and the financial circuits that they create. The key questions I am concerned
with are how low-income households engaged in incremental building efforts become
(financial) clients in these schemes, what possibilities and risks this entails, and how to
evaluate the situation in terms of critical debates about the role of finance in housing
and development. I draw on a review of housing and urban development policies in
Mexico, Latin America and beyond, complemented by a series of qualitative interviews
with representatives of institutions and organizations in the field of housing provision
and an empirically grounded account of a case study. The latter profiles a pioneering
collaboration of a social enterprise with a financial firm in providing technical assistance
and credits, combined with state subsidies for upgrading existing self-built homes in
Ecatepec, one of the oldest, largest and most densely populated informal settlements in
Mexico City. The collaboration was established in 2014 and continued until 2016.
Based on these insights, I demonstrate in this article the complexities of the
financial inclusion agenda in the housing sector of developing countries, and analyse
the tensions between commercial interests and advocacy approaches. I highlight the
ambivalences that emerge from the multiplicity of operational logics and motivations
1 An Agencia Productora de Vivienda (APV) is a Mexican housing production agency.

ASSISTED SELF-HELP HOUSING IN MEXICO 949
in the field of housing provision for the poor by drawing on the three focal concepts
of risk, debt and marketization, which have been mobilized in critical debates about
financialization and development. I show why these concepts have limited value in
assessing whether, how and to what extent financial logics are extended and deepened
if these logics are not qualified and viewed against substantiated evidence on the level
of practices, motives and social interaction. An understanding of the conflicting role
of the intermediary that interacts with households––the social enterprise––is crucial
in this regard. My main argument is, first, that these kinds of social-sector actors are
important negotiators in making financial rationalities and disciplining work in favour
of households instead of against them. I contend that this creates opportunities for
subversion and, possibly, politicization. Secondly, I suggest that such actors, through
their involvement, create the very spaces of marketization that allow financial actors to
extract value. Social-sector actors’ methodologies can thus be appropriated for profit-
seeking financial purposes.
The article consists of seven further sections. In the next section I review the
debate on the role of finance in and for self-help housing, with a particular focus on
Latin America. In the third section, I present the methodology I used and discuss
the significance of the empirical data collected. In the fourth I examine how self-
help builders become clients in this model of assisted self-help housing, and in the
fifth I discuss which interests are served by the creation of these new markets for
credit and professional services. The sixth section points to several ambivalences that
arise when analysing this model in light of the three focal concepts of risk, debt and
marketization. In the conclusion I explicate the significance of my findings and the
conceptual contribution of this article.
Self-help housing, development and finance

Self-organized and incremental building practices in low-income countries
are defined by a scarcity of financial resources. Mortgage lending characterized by
large loans and long-term repayment periods is not accessible to the vast majority
of poor households who lack regular incomes and formalized land titles to provide
collateral (Gilbert, 2000). Development planning practitioners and researchers
have long called for housing-finance strategies that meet the urban poor’s need for
small amounts of money and short-term lending (Bredenoord et al., 2010; Ferguson
and Smets, 2010). These arguments stand in a tradition of research and practice
concerned with self-help building conducted since the 1960s, much of it based on
the work of John Turner (1976) and centred on the basic argument that ‘incremental
building fits the livelihood strategies and conditions of the poor’ (Ferguson and
Smets, 2010: 288). Turner’s ideas and influence have been subject to criticism over
the years. Marxist scholars have sought to prove the ineffectiveness of self-help
building, arguing that the use-value of the self-built home is (more or less) inevitably
subject to later commodification (Burgess, 1977; Conway, 1982). Other main points of
critique have been that self-help building constitutes self-exploitation, as it involves
unskilled people doing unpaid work that skilled artisans would otherwise do more
efficiently; that it violates planning principles and results in inefficient allocation
of resources; that its individualizing logic prevents evaluation and learning for
other projects and ultimately results in a lowering of housing standards; and lastly,
that it can be politically reactionary and inhibit political action (Marcuse, 1992;
Mathéy, 1992). In the context of the current financial inclusion agenda, such debates
are no longer present. We can see a consensus among development institutions and
many scholars that microcredits for housing constitute a crucial strategy to help
provide adequate shelter and ‘increase the speed and efficiency of the [self-building]
process’ (Ferguson and Smets, 2010: 289; see also UN-Habitat, 2005; Bredenoord
et al., 2010; Merrill, 2012).
GRUBBAUER950
At present, two main forms of housing finance are available to self-help builders.
These are, on the one hand, self-initiated forms of community-based finance such as
the Slum Dwellers International Network, where finance becomes ‘the organising
mechanism to present and strengthen a political challenge’ (Mitlin, 2011: 1224). On
the other hand, there are more and more commercial variants of housing-finance
provision for low-income groups. Housing microcredits are mostly small-value, non-
mortgage home improvement loans offered by microfinance institutions operating under
a wide range of legal structures. Many of these institutions began as NGOs and later
transformed themselves into non-bank financial corporations. But in the past ten to
15 years there has been an increase not only in the commercial funding of microfinance
but also in the emergence and diversification of structured financial products for
institutional investment in microfinance. Annual growth rates in this market were
above 20% during the period from 2006 to 2016, and the total market of microfinance
investment vehicles had an estimated asset volume of US $13.5 billion in 2016, up from
US $2 billion in 2006 (Symbiotics, 2017).
Scholars have pointed out how the recent evolution of microfinance-related
financial networks and practices reveals in an exemplary way how ‘global macro/micro
financial flows, logics and institutions are dynamically intertwined’ (Mawdsley, 2018:
270; see also Bond, 2013). At present, Latin America and the Caribbean represent
one third of all securitized investment in microfinance, and no other region accounts
for a larger share (Symbiotics, 2017). Housing microfinance is thus viewed as a
potential growth market by the global finance, construction and retail sectors. Critics
emphasize the commercialization of microfinance and its adverse effects, including
excessive profit orientation and high interest rates, multiple borrowing and client
overindebtedness, the use of loans for short-term consumption needs and the increased
share of wealthy clients (Murdoch, 2000; Roy, 2010). However, so far there has been
very limited research on the specific deployment and expansion of housing microfinance
instruments (an exception is Maringanti, 2009). This can be attributed to the long
history of microfinance instruments targeting rural populations whereas housing
microfinance products target mostly urban households. Much of the work that questions
the effectiveness of microfinance in delivering poverty alleviation focuses on rural
microfinance (Young, 2010; Rankin, 2013; Weber, 2014). Similarly, wider debates about
financialization and development also tend to focus on rural contexts, for instance, by
drawing attention to the ways in which financial logics enter small-scale agricultural
production, groundwater provision and environmental conservation (Sullivan, 2012;
Taylor, 2013; Isakson, 2015).
Nevertheless, an important insight provided by critical development studies,
which also helps us understand the move of microfinance institutions (MFIs) into
housing microfinance, is how––in mainstream development policy––microfinance has
seemingly been replaced by a wider agenda of financial inclusion (Soederberg, 2013;
Carroll and Jarvis, 2015). Since the financial crisis and, most pronouncedly, since 2010,
the World Bank and its private-sector arm, the International Finance Corporation (IFC),
have turned towards explicitly promoting private-sector-led economic growth, also in
the realm of housing (Waeyenberge, 2018). Development policy is now less technocratic,
direct and state-oriented, and more oriented towards the extension of market relations
than in its earlier phases (Carroll, 2012). This entails targeting developing states as
‘emerging markets’ and prioritizing ‘access to finance’, aimed ‘explicitly at deepening and
expanding financial markets and logics in the name of development’ (Mawdsley, 2018:
265).
Interestingly, there has been little overlap in the critical assessment of
microfinance and strategies of financial inclusion in development studies and the
critical debate on financialization within urban studies. In this article, I draw on both
strands of literature to reflect on housing policies that seek to systematically incorporate
forms of commercial microcredits with the intention of improving the housing situation
of the poor. For the conceptualization of finance, I draw on cultural and political-
economy perspectives to assess the lived realities of credit practices (Martin, 2002)
and the significance of the role of the finance sector in expanding capitalist markets
(Christophers, 2015a) into the informal housing sector. Rather than automatically
granting the concept of financialization explanatory value and providing confirmation
of how it plays out in another ‘empirical domain’ (ibid., 2015b: 196), I am interested in
understanding what happens if financial instruments are expanded to target the poor
as clients and how to evaluate such processes.
Reflections on methodology and significance of the case study

This article is based on research that has evolved in several phases. Its foundations
were laid during a year-long research fellowship at the National Autonomous University
of Mexico (UNAM) in Mexico City in 2014/2015, when initial contact was made with
the social enterprise that served as a case study.2 In mid-2015, the first phase of research
was conducted in the form of in-depth interviews with several social-enterprise and
financial-firm members. The interviews were complemented by observations and
informal conversations during visits to four homes and the office of the social enterprise
in Ecatepec. A series of 15 interviews with housing institution representatives, housing
enterprises and academic experts followed. Over the past years, I have closely followed
the work of the social enterprise, meeting members on several occasions, both in Mexico
City and in Hamburg. In mid-2018, after receiving funding to conduct a three-year study,
we entered the second phase of research. This article builds on insights from the first
stage of field work3 in early 2019, which involved another series of in-depth interviews
with members of the social enterprise and housing experts, visits to 12 households in
Ecatepec who had worked with the enterprise to remodel their self-built homes, and a
group discussion with enterprise members, a leading housing activist, a representative
of the Institute of the National Housing Fund for Workers (Instituto del Fondo Nacional
de la Vivienda para los Trabajadores, or INFONAVIT) and students from Germany. The
households visited were selected to represent a wide spectrum of intervention types,
socioeconomic backgrounds and locations; in addition, the householders’ lengths of stay
varied, and buildings were at various stages of completion.
Safety considerations and the challenge of outsiders establishing contact with
inhabitants restricted fieldwork in Mexico City. Ecatepec, the case study locale, is
known for its high crime and delinquency rates. Entering Ecatepec is considered
risky for outsiders and visits are recommended only in the company of people who
know the area well. Thus, contact to households in the assisted self-help housing
schemes needs to be established through the social enterprise’s supervisors who work
on site. Developing such cooperation requires time and trust. The advantage of the
lengthy research period in the present study is that changes could be observed over
time. Thus, conversations with the social enterprise took place throughout the inception,
operation and termination phases of its collaboration with the financial investor. In
terms of research ethics, all insights related to the case study depended on members
of the enterprise generously sharing their knowledge, providing access to data and
establishing contact with households. Therefore, in this article I aim for a sympathetic
critique of the processes and mechanisms observed. This includes acknowledging, first,
the genuine efforts of this enterprise to improve housing conditions for the poor and
the ethos that drives this work. Secondly, I recognize the generosity of households who
2 The names of the social enterprise and the financial firm are withheld to ensure the anonymity of the interviewees
and the agencies.
3 The second phase will include a household-level survey, complemented by in-depth case studies of the situations
of individual families and ethnographic observations to analyse changing attitudes to finance and consequences
of debt and risk.
GRUBBAUER952
shared their experiences and granted us access to their homes. To respect the privacy of
householders and to allow for exchanges built on trust, conversations with interviewees
were not recorded.
It is important to justify the significance of the case study presented here, as it
serves as a lens through which the broader topic of expanded access to housing-related
finance for the poor is analysed. First, the approach of the enterprise is exceptional
because of its localized, personal and case-by-case methodology. The enterprise is an
SHF-registered APV. Currently, 34 APVs are registered with the SHF to provide self-
help housing supervision and technical assistance (SHF, 2019c). Only a handful of actors
among these employ such a case-by-case approach, while the others rely on different
forms of prototyping and ready-made modular systems. Secondly, the cooperation
with the financial investor in the Ecatepec project, a Mexican non-bank multipurpose
financial institution, was exceptional (and unique in the Mexican context) in testing how
such a localized approach could match the requirements of a for-profit investor in terms
of financial sustainability. The investor sought to expand its activities from conventional
mortgage finance into microfinance; the firm was directed to the social enterprise
based on recommendations that the group ‘would know the market as no one else’, as
the enterprise director recalls (interview, 24 March 2015, Mexico City). Consequently,
the SHF adjusted its rules to make the cooperation a pilot project––the first of its
kind within its schemes––and also agreed to allow the social enterprise to use its own
methodology. In total, 442 remodelling projects were completed between 2014 and
2016 in cooperation with the financial firm, out of a total of 2,337 projects implemented
in Ecatepec between 2008 and 2018. The other projects were executed in cooperation
with an NGO between 2008 and 2014 and a savings-and-loan cooperative from 2016
onward.4 Finally, the case study is relevant because it has attracted much attention
from national and international housing and development institutions. The group has
presented its work and experiences to international experts on several occasions and
hosted tours for representatives of the World Bank and other institutions. The members
of the social enterprise have well-established networks and have advised the national
government on various occasions; moreover, they contributed to the formulation of the
new Housing Law in 2006 and are currently part of the advisory committee to president
López Obrador.
The making of clients

Households become (financial) clients in the assisted self-help housing scheme
by meeting certain criteria based on creditworthiness (having enough income to pay
back a loan) and need (incomes may not exceed the limit of five monthly minimum
wages to qualify for a state subsidy). The financial investor performs a client
assessment based on the information clients and an external credit agency provide.
Once the loan is granted and eligibility to receive the state subsidy has been confirmed,
the architects of the social enterprise develop a detailed project design in conjunction
with the households. This design is based on a site visit, on an assessment of the
existing structure and on habitability conditions. The total project volume consists
of the subsidy, the credit and any available savings. Calculations regarding the latter
amount take into account non-monetary household contributions such as building
materials or labour. The subsidy is the largest component: it averages twice the credit
amount and is granted through various entities. The largest share continues to be
processed by INFONAVIT and is thus limited to individuals with formal employment
(see Figure 1).
4 The social enterprise also runs projects in urban and rural areas in the states of Puebla and Hidalgo, in cooperation
with two savings-and-loan cooperatives. From 2008 to 2018, they advised a total of 5,589 families, of which 2,337
(42%) lived in Ecatepec.
300,000
PROGRAMA DE
250,000 RECONSTRUCCION (reconstruction
programme)
200,000 OTRAS ENTIDADES EJECUTORAS
(all other entities)
150,000
OREVIS (all state housing
100,000 institutions)
50,000 INFONAVIT (Institute of the

National Housing Fund for
Workers)
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
FIGURE 1 Housing subsidies granted by CONAVI through various entities, 2007–2015

(the number of issuances includes subsidies for acquisition, improvement and self-
construction) (source: CONAVI, nd, subsidies, annual data)
For the 442 projects executed with the financial investor in Ecatepec, combined
subsidy expenditure totalled 992,000 pesos, credit expenditure totalled 356,000 pesos,
and savings expenditure amounted to 247,000 pesos. For all projects between 2008
and 2018, subsidies made up 57%, while credit accounted for 20%, and savings for 23%
(Solís, 2018). The remodelling was organized by the householders themselves, either
through self-construction or by subcontracting. Construction was supervised by the
social enterprise through at least three more site visits. The social enterprise reported
that the SHF had sought to minimize bureaucracy from the outset and had considered
technical assistance in particular as dispensable. This was in stark contrast with its own
view, which considered technical assistance to be of critical importance:
It might be a small amount that people receive for assistance, but if they are
meant to not do things as they have always done, they need to have someone
tell them how to improve so as to invest the little they receive in the best
possible way (interview with a representative of the social enterprise, 24 March
2015, Mexico City).5
Members of the social enterprise stressed that the quality of their advisory work was
directly related to the length of their interaction with a household.
Researchers, in turn, have emphasized how consumers of financial services
‘increasingly act as entrepreneurial investor subjects’ (Hall, 2012: 405). At the heart
of these new financial subjectivities is the transfer and individualization of risk
(Martin, 2002). Households who decided to work with the social enterprise could
be seen to accept, plan for and increase their risk in a range of ways, though without
necessarily having the ability to fully assess the conditions and the consequences of
this risk. Most households that participated in the project were first-time borrowers,
according to the social enterprise. Yet self-help builders as clients within the project had
to take decisions about the future over time spans that were often difficult to foresee
for poor households with variable work opportunities and income, and based on highly
dynamic household compositions (Ward et al., 2011). One of the architects of the social
enterprise provided an example of this type of challenge:
5 All quotations were translated from Spanish by the author.

GRUBBAUER954
Look, there are times when they change [the project] because suddenly they
decide to do so, as in many cases their situation changes. It happens often to
us, as these are multi-family lots, and relations are not that strict. For example,
my sister-in-law will endow me with this little [plot] from here to there, so they
make the project from here to there, but when you arrive at the construction site
after signing the contract and all, they say: no, now it’s going to be from here
to there––and this changes the whole project. Or there is the typical case of ‘my
daughter will come back from the United States and will come and live with us’,
or similar cases, so the situation of households is fairly variable (interview with
architect, 21 April 2015, Mexico City).
For the households, deciding on the remodelling project involves planning and
budgeting as ‘common instruments of “future-making”’ (Green et al., 2012: 1642). The
planning relates, first, to decisions about the immediate future in terms of selecting loan
terms and conditions. The total amount of the loan ranges between 15,000 and 34,000
pesos (US $880–2,000) for autoproducción (self-production) and between 12,000 and
24,000 pesos (US $700–1,400) for mejoramiento (improvement). According to data from
the social enterprise, households in the project typically seek to minimize uncertainty
by opting for short-term loans of up to two years. Secondly, households have to plan
for the short-term future by deciding on how to organize the remodelling project itself
within a specific time frame, usually three months, to comply with CONAVI regulations.
This requires them to plan for the logistics of the project, including sourcing building
materials and managing their own manual labour and any help from family and friends
or contracted workers. Thirdly, households have to decide on their more distant future
in respect of the needs that inform the remodelling project. Self-help-built homes are
typically built for a lifetime, as residential mobility in terms of ownership is extremely
low (in contrast to the higher mobility of individual household members). A study by
Ward et al. (2011) compared ownership patterns in informal settlements in Mexico City
over 30 years and found that over 80% of plots were still occupied or owned by the same
householders, even if one original-owner parent had died.
Such planning requirements compel households to comply with new forms of
discipline, above all the commitment to regular biweekly payments. Such methods of
financial discipline as part of broader ‘development imaginaries’ (Green et al., 2012)
pose fundamental challenges for first-time borrowers. The social enterprise reports that
borrowers have a problem with accepting that two advance deposits on set payment
dates form a precondition of the loan. The problem here is often not the availability of
money but rather that it has to be registered in the account at a specific date. Another
disciplining effect results from the short deadlines set for completing remodelling
projects. This restriction can be difficult to comply with, for instance, when unforeseen
technical difficulties arise. One family had to ask for an extension of several months
because a rock was discovered on the site they had designated for an underground
water tank, which they had to manually hack to pieces before they could install the
tank. Finally, another form of discipline is imposed by CONAVI regulations. Generally,
householders tend to maximize their usable area, accepting that a building may remain
incomplete for decades, because they seek to secure its functionality at some point in
the distant future (Holston, 1991). These kinds of ideas are disciplined by regulations
that require homes to be officially deemed habitable and weather-resistant, i.e. that they
have a roof, windows and water/sewerage connections.
The various modes of disciplining confirm a fundamental critique against
microfinance organizations and other financial intermediaries: that they serve as ‘a
key modality for instilling market discipline’ (Carroll, 2012: 381). Yet households do
profit in practical ways from the specific model of assistance observed in the case study.
Most importantly, they receive a subsidy that enables more substantial remodelling
activities than they would achieve using their regular income. CONAVI regulations are
typically unknown to poor households or difficult for them to implement. Theoretically,
households could apply for subsidies on their own; practically, they need support, so
most of them apply through intermediaries. This, in turn, allows the social enterprise
to reach out to people, as one architect confirms:
It is clear to us that without the subsidy we cannot reach this market, because
there is no experience; people have never required architects before, and
they have always worked with builders; so the only way to enter is through the
subsidy; it opens new ways for orientation. People now come to us (interview
with architect, 24 March 2015, Mexico City).
Besides benefiting from the subsidy, households also benefit from the technical
assistance they receive through project briefs, which include drawings and calculations
for the required building materials, and through several site visits by the supervising
architects. The architects stress in particular that households are able to emancipate
themselves from the expertise of local builders and control their use of building
materials. Calculations for required building materials, in conjunction with cost
estimates, also allow them to save on expenses and make the use and storage of materials
more efficient (interview with architect, 13 May 2015, Mexico City). This helps reduce
theft and deterioration of surplus materials, which several families pointed out as
major burdens. In addition to professional support helping households save resources,
it often also significantly reduced health risks and hazards. Data from the architects’
documentation revealed that around three quarters of projects needed structural
engineering, 11% of which involved serious structural problems. Only in one quarter
of projects are the householders primarily concerned with interior fitting (Solís, 2018).
Typical interventions that were visible in all the visited homes, aside from structural
remodelling and floor extensions, encompassed reorganizing the home’s layout, moving
staircases and improving circulation, introducing natural light and ventilation in all
rooms, and solving problems with dampness and mould. Because of the incremental
building processes and complex household compositions, self-built homes are often
immensely challenging to deal with, as one of the architects comments:
The truth is that in Ecatepec I concentrate on functionality. This is very

complicated. These are tough projects: architecturally very joyful, [but] also
challenging, like puzzles that you need to solve. They are not easy to resolve,
though, because at the same time, you remodel the relation between the
daughter-in-law and the mother-in-law with the cousin who comes from there,
through a corridor of this size, which all of them share. So the distribution is
difficult and, most importantly, these are spaces which are small and you [as the
architect] have to be very efficient to be as useful as possible (interview with
architect, 21 April 2015, Mexico City).
Architects report that, in the beginning, households are not always convinced of the
proposed changes. Discussions with families as to the most useful solutions are often
time-consuming; in many cases, households become convinced through examples
found in the homes of neighbours or relatives. Also, households don’t always follow
established plans or conform to regulations. In one case, a family had prioritized the
construction of a second floor and disregarded the obligatory instalment of windows on
the first floor. In such cases, the architects negotiate with CONAVI and try to secure the
household’s subsidies in spite of this disregard for regulations.
However, projects are only contracted to households that agree to minimum
construction standards. Architects state that they don’t want to leave the homes in a
GRUBBAUER956
worse condition than they found them. This seems to be why client satisfaction with
remodelling projects in Ecatepec is reportedly high. New projects are contracted only
on the basis of local word-of-mouth promotion. An evaluation carried out in 2015
found that 85% of beneficiaries invested more resources in the projects than they were
obliged to (Solís, 2018). Overall, payment delays were generally very low (6% on average
between 2008 and 2018 across the three financial intermediaries). However, there was
a significant difference in approval rates for households to become clients: whereas the
financial investor, using standard assessment tools, accepted only half of applicants, the
savings-and-loan cooperative essentially accepted all applicants.
In sum, the evident potential of improving living conditions of poor households
through the model of assisted self-help housing analysed here precludes the easy
application of many critical arguments levelled against microfinance and the wider
financial inclusion agenda. The section that follows places this case study of assisted
self-help housing in the context of expanding markets for housing microfinance and
discusses which interests are served by these new markets for credit, building materials
and professional services.
The making of markets

In the view of business actors and mainstream development organizations, self-
builders constitute potential consumers, whose demands are justified by a lack of decent
housing and restricted access to the traditional banking sector (SEEP, 2014; TCIS, 2017).
The SHF follows this line of argument in its assessment that the two thirds of Mexico’s
total housing stock that are the product of self-organized building constitute a vast and
so far largely underserved market. Based on the 2010 census, CONAVI calculated the
number of homes in need of improvement or remodelling at 11.8 million, and regarded
2.8 million homes as completed. Based on these figures, the CPSV estimates that more
than three fifths of families who require improvement or remodelling are restrained
from doing so by poverty. They have no access to regular credit, and around two thirds
have no social security, which prevents them from benefiting from the financial schemes
offered by INFONAVIT or FOVISSSTE (Fondo de la Vivienda del Instituto de Seguridad
y Servicios Sociales de los Trabajadores del Estado) (CPSV, 2012). Another argument
business actors offer in favour of housing microfinance products is that microloans for
housing improvement and remodelling serve to reduce commercial risks. The risks of
late payments and credit default in these portfolios are reportedly lower than in other
microfinance schemes, because households seem to exhibit greater financial discipline
when investing in their homes (TCIS, 2017). This was also the explicit expectation of
the financial investor in the Ecatepec project. Finally, business actors are also interested
in expanding housing microfinance products because of their alleged social impact of
‘largely improving quality of life and happiness, sanitation and health, and security of
tenure’ (CISF, 2015: 27). Whereas conventional microfinance schemes have come under
attack for not delivering on promises to alleviate poverty (Roy, 2010; Weber, 2014),
housing microfinance allows business actors to counter such criticism by visibly
improving living conditions.
Development institutions such as the World Bank and the Inter-American
Development Bank (IDB) have actively supported private-sector activity over the past
few years. Carroll (2012: 379) argues that this ‘deep marketisation of development’
constitutes an expansion and transformation of neoliberal development policy. It occurs
through the work of private-sector-oriented organizations, such as the World Bank’s
International Finance Corporation (IFC) and the IDB’s Multilateral Investment Fund
(MIF), which are instrumental in ‘deepening market activity around the state, while
simultaneously fomenting shifts in the state that are seen as conducive to “ideally-
conceived” patterns of capital accumulation’ (ibid., original emphasis). The Mexico
case shows how such market-centred development agendas nevertheless crucially
rely on state institutions for providing ‘enabling environments’, even in contexts

where corruption and violence have become endemic and law enforcement is largely
dysfunctional. The SHF (itself a product of World Bank intervention in the early 2000s)
is a crucial partner of international donor organizations in Mexico and makes strategic
use of its various funding schemes to expand financial services and incentivize private-
sector activities related to housing and infrastructure provision (Soederberg, 2015). The
SHF requires financial intermediaries and APVs to register and become certified before
being allowed to cooperate within the subsidized housing schemes. These reporting and
governance practices are aimed at reducing risk and enhancing accountability, while
also regulating access to the favourable refinancing conditions the SHF makes available
to investors.
Clearly, in Mexico these state-led attempts to expand financial services to the
poor have led to shifts in the housing markets, including heightened levels of segregation
(Monkkonen, 2012). However, what we see are not necessarily new actors emerging but
rather established actors within mortgage financing and non-banking financial activities
moving into and experimenting with housing microfinance schemes to expand their
established activities. All of the 15 financial institutions currently registered with the
SHF for the assisted self-help housing scheme also offer other types of credit for housing,
including mortgage loans (SHF, 2019d). In total, credits for acquisition still make for
the largest share, as the figures for 2015 show. Out of the 1,159,483 total credits granted
by various institutions for housing purposes, 53% were used for the acquisition of new
homes, 38% for improvement and 9% for self-production (see Table 1).
Beyond financial-sector activities bound up with the state-led housing
programmes, another more general shift has been the increasingly blurred boundaries
between the retail, construction and finance sectors, visible also in the variety of
enterprises registering as APVs. These range from commercial construction companies
and producers of building materials to architectural firms, housing enterprises and
NGOs. Beyond these SHF-registered actors, various building suppliers and general
retailers have also entered the market for self-organized construction. To attract clients
and win their loyalty, distribution networks are expanded and technical assistance is
often offered together with these microcredits, under the condition that the material is
sourced from the respective company. Building-material producers, such as the leading
cement companies Cemex and Holcim-Lafarge, and building suppliers, such as the US
company Home Depot, have adopted this approach in Mexico. The rationale behind
this is that the low-income housing market, with its steady demand for basic building
materials, i.e. cement (informal housing construction accounts for roughly 40% to 50%
of total cement use in Mexico), is comparatively unaffected by construction-sector
business cycles and can act as a buffer when demand for formal construction is low
(Fry, 2013). Of the total volume of cement sold by Cemex on the national market, 60%
is distributed through the company’s chain of building-supply stores, Construrama,
launched in 2001 to extend the company’s reach into low-income markets. It currently
comprises 3,000 stores across the country, offering all the basic building materials
TABLE 1 Number of credits granted according to type of intervention, 2015
Acquisition Improvement Self-production

INFONAVIT 380,000 280,000 0
FOVISSSTE 50,000 20,000 0
Banks 130,000 80,000 40,748
Other entities 55,109 62,623 60,000
Total 615,109 443,623 100,748
source: CONAVI (nd)

GRUBBAUER958
needed for self-construction. The continuously rising levels of cement consumption

have been discursively framed by a ‘necessity narrative’ serving to normalize the use of
cement and prevent the use of alternative, more sustainable building materials (ibid.).
The making of these new markets for (housing) microfinance crucially builds
on the principles of social-sector and community organizations, but also on market
strategies that respond to the lived realities of low-income households without
formal work contracts or land titles. The principles of social collateral typical for the
microfinance sector are also adopted for the assisted self-help housing schemes: family
or friends guarantee loan repayment in case of default. Furthermore, as is evident from
the case study, information about household incomes is accepted without official proof,
and proof of ownership is established through confirmation of habitation, for example,
through telephone bills rather than formal land titles. Another type of adaptation to
low-income households’ livelihood practices is the acceptance of a household’s non-
monetary contribution to the remodelling project as part of the overall calculation
of project costs. This allows households to make extensive use of social networks
and solidarity within communities, for instance, by using leftover building materials
provided for free by other households or relying on unpaid labour by extended family
members, friends and neighbours. In fact, the whole idea of technical assistance to self-
builders adopted in these schemes, in the case of Mexico at least, has strong roots in the
advocacy approaches of housing activists (Ortiz, 2015).
From the perspective of business actors, the advantage of housing microfinance
schemes that include technical assistance is that these are expected to improve client
satisfaction and loyalty and, ultimately, to ‘increase the client’s ability to repay’ (CISF,
2015: 20). While technical assistance in the case analysed in this article can certainly
be regarded as beneficial to households, this is unlikely to be true of all the commercial
assistance offerings of large retailers and producers. Cemex’s Patrimonio Hoy
programme, launched in 2000, is the most significant example of how the construction
sector incorporates microfinance schemes and social collateral. Clients organize
themselves into small savings groups, with local promoters receiving benefits when
they sign up new clients. In exchange for their savings, the clients receive building
materials sourced from local Construrama stores, as well as technical advice. While this
helps Cemex to expand its client base, the advantages for clients are less clear. Salazar
et al. (2011) show in a study of households in Zinacantepec that most families achieved
an improvement of their housing situation through the Patrimonio Hoy programme.
However, social objectives, such as health improvement, increased savings and greater
participation in community groups were not met.
The overall impact and reach of housing microcredit schemes in the Mexican,
Latin American and global contexts are difficult to assess because of a lack of academic
research on the topic. To date, the recent expansion of housing microfinance markets
has been reflected on only in terms of market surveys and best-practice business models
(Hartman and Werhane, 2009; SEEP, 2014; Stickney, 2014; TCIS, 2017). Castillo (2011)
found that, in the Mexican microfinance sector in general, profit-oriented FMIs
significantly differed from altruist, socially minded institutions in terms of higher
operative costs and interest rates. The Mexican bank Compartamos is a particularly
controversial example of the commercialization of microfinance: founded as an NGO in
1990 and transformed into a full-service bank in 2006, it is now the largest microfinance
institution in Latin America. It has 2.8 million clients in Mexico and dominates the
Mexican market with a share of 42% (ProDesarrollo, 2015). Compartamos launched its
housing microfinance product in 2006. The credit volume of Crédito Crece y Mejora
(‘Credit Grow and Improve’) currently lies between 8,000 and 30,000 pesos (US $400
and $1,600), with interest rates between 70% and 90% per year. Total costs of the credit,
including fees and taxes, are up to 120% per year. Yet, even if some MFIs now label
their products as housing microloans, it is far from clear how housing microfinance is
defined in different contexts. In its broadest sense, housing microfinance might even
refer to mortgages or purchases of complementary goods and household appliances.
This potentially overlaps with the recently emerging category of ‘green loans’ for the
purchase of energy-efficient or environmentally friendly products, such as solar panels
or home insulation (Symbiotics, 2017). Regardless, loans for renovation and incremental
construction make for a small, albeit growing, part of microfinance as a whole. According
to a market study for the period from 2009 to 2014, based on data from the nine largest
microfinance institutions in Mexico, the share of loans based on monetary value for
housing improvement amounted to 13%, compared with 71% for micro-enterprises and
16% for general consumption needs (Martínez, 2015).
Business actors typically refer to several obstacles in expanding housing
microfinance products. These include comparably high administrative costs, difficulties
in providing technical assistance and added services in an efficient manner, and unclear
prospects for achieving greater scale (Stickney, 2014; TCIS, 2017). To become financially
sustainable, for-profit MFIs strive to lower transaction costs and scale up their activities.
The financial investor interviewed confirmed that the project in Ecatepec had not been
financially profitable for the firm until one year after granting the first loans, but that
its goal was to expand the firms’ activities. The project in Ecatepec was used to enter
the market and learn from the social enterprise. Ultimately, the financial investor itself
intended to offer the entire service, including technical assistance. Differing views
on the role, impact and quality of the technical assistance on the part of the social
enterprise and the investor were, in the end, major drivers for the termination of the
cooperation. The investor’s aim of scaling up while reducing the scope and quality of
added services proved incompatible with the social enterprise’s emphasis on social
impact and a localized, face-to-face approach. Ultimately, these two market actors
follow contradicting rationales, as I shall discuss in the next section.
Ambivalent assessments: risk, debt and marketization

Markets for housing microfinance products in Latin America are characterized
by an extremely diverse spectrum of actors that ultimately approach clients from
two different directions: non-bank financial institutions expanding into housing
microfinance, on the one hand, and community-based initiatives and financial
cooperatives expanding into microlending to improve the housing situation of specific
communities, on the other hand. Moreover, most approaches that make use of housing
microfinance schemes, whether coupled with state-provided subsidies or not, have
drawn from assistance offerings that have been part of housing activist strategies in
Mexico and Latin America since the 1970s. In the subsections that follow, I wish to
highlight the ambivalences that emerge from this multiplicity of operational logics. This
will be done in light of three focal concepts scholars have drawn on for critical accounts
of the role of finance in development: risk, debt and marketization.
—— Risk
Risk provides a useful point of entry for our understanding of how self-help
builders become financial clients, and what contradictions are involved in this. One
essential aspect of financialization is ‘a significant revaluation and reallocation of risk,
which is now diffused widely throughout the economy’ (French et al., 2011: 802). Yet risk
is not an objective reality. Scholars have pointed out how risk is socially constructed and
provides for modes of governance that classify customers into different categories and
regulate their behaviour. As Rankin argues, risk is ‘socially constituted in and through
mobilisations of financial subjectivity … through ascription of risk-inducing or risk-
averting attributes and with recourse to racialised and gendered forms of difference’
(Rankin, 2013: 554). In the world of financial services, risks need to be calculated
when setting interest rates and regulating repayments. Ultimately, determining and
GRUBBAUER960
calculating risk can be seen as a form governance, ‘of ordering reality, of rendering it
into a calculable form’ (Dean, cited in Langley, 2008b: 480). In housing microfinance,
business actors confirm that targeting low-income clients is combined with an explicit
mission: to ‘educate housing microfinance clients in developing positive financial
behaviors’ (TCIS, 2017: 63).
Households clearly accept new financial risks when undertaking projects such
as the ones described here. When seeking to politicize such expansions of financial logic
we have to deconstruct the apparent rationality of the creation and calculation of risk
that leads to interest rates that are much higher than those charged on conventional
mortgage loans. The cumulative interest rates for credits within the Ecatepec project
ranged from 23% for 18-month loans to 47% for four-years loans. These rates lie in the
middle to upper ranges for conventional commercial microfinance schemes (Rosenberg
et al., 2013). Yet the social construction of risk and the governance thereof also involves
negotiation, as the case study reveals. Social enterprises and the investor were in a
continuous struggle to establish common guidelines to assess potential clients. The
financial investor, with only partial knowledge of households’ situations, had to rely
on the ground knowledge of the social enterprise. Face-to-face interaction between
households and the social enterprise refined the system of calculation and, at the
same time, undermined it, as the social enterprise, in its efforts to support households,
sought to circumvent regulations. From the perspective of the households, weighing
up the new financial risks of taking out microloans against this support is difficult,
and possible only on a case-by-case basis. The key question is not what the risks
are, given that the establishment and calculation of risks ultimately constitute social
processes. The question is how the handling of existing risks or acceptance of new risks
requires changes in practices and behaviours that work in favour of or possibly against
households’ interests.
—— Debt
Linked to the topic of risk is the issue of debt and how to evaluate it. Financial
inclusion proponents avoid speaking of debt and follow an interpretation that
normalizes consumptive borrowing based on the assumption that ‘poor people already
effectively have the money, in the form of either past or future income’ (Mader, 2016:
66). Taking out loans is then merely a question of planning, not of debt, ‘as they [the
loans] allow poor people to bundle and shift incomes and expenses (including probable
future incomes and expenses) over time, in order to buy what they need, cope with
shocks, and plan ahead’ (ibid.). Critics point out how access to finance in fact expands
exploitative debt relations through normalizing credit-based consumption practices
(Roberts and Soederberg, 2014). Roberts and Soederberg (ibid.: 665) argue that the
working poor in countries such as the US or UK––countries with particularly high
levels of personal debt––are increasingly reliant on high-cost forms of consumer credit
to compensate for missing wages and social security payments. The authors interpret
debt, for workers, as a ‘dispossession of their wages’ that ‘normalizes social insecurity’
and serves as a ‘neoliberal fix for the crisis in social reproduction’. This is aggravated
by loans specifically ‘designed to exploit vulnerable and unsophisticated borrowers’
(Aalbers, 2009: 38), as has been the case in subprime and predatory lending.
However, criticizing housing microfinance primarily on the grounds that
it establishes debt relations negates the fact that housing activists have, for a long
time, fought for such opportunities. Mader (2016) has pointed out how the long-term
struggle to grant black households access to credit in the US has also played a role in the
expansion of subprime lending. Similarly, projects of assisted self-help housing such as
the one described here seem to fulfil the demands of housing activists for finance and
assistance schemes adapted to the needs of self-help builders (Ortiz, 2015). Moreover,
such projects are often personally run by people with decades-long histories of activist
engagement in the non-profit sector (Connolly, 2018). Also, the general argument that
debt normalizes social insecurity by compensating for missing wages is not really
relevant in the context of the realities of poor urban dwellers in Mexico, a country where
approximately 60% of all employment is informal and social insecurity is the norm. In
this context, a certain amount of money available at a particular moment in time might
actually allow for planning and acting in beneficial ways. Nevertheless, the fact that
interest rates in microfinance are considerably higher than those for conventional loans
can certainly be judged as exploitative.
The key question is then one of equal conditions in borrowing rather than
whether borrowing should be made available to low-income households at all. Whether
conditions can be deemed equal depends not only on the terms and costs of loans but
also on the existence of trust-based relationships. The households we spoke to confirmed
that trust in the social-enterprise advisors was a major factor in their decision to enrol in
the programme. This trust was usually established through personal recommendations
but also through private encounters. One client had become acquainted with one
of the architects in a local gym and had learned about the scheme from her. Social-
science analyses of finance stress how face-to-face practices of mortgage and consumer
borrowing of the early post-war decades have been replaced by practices of at-a-distance
repayment (Langley, 2008a: 136). The advocacy approach described above builds exactly
on the kind of face-to-face interaction that allows a client’s trustworthiness to be
assessed but also supports households in their applications and enables lending to occur
beyond the procedural norms of mortgage finance. By contrast, the director of the social
enterprise reported that the financial investor’s employees worked exclusively from
their offices and never visited the families to collect or enquire about payments because
they were scared of going to their clients’ neighbourhoods.
—— Marketization
The financial inclusion agenda views financial intermediation (preferably by
means of digital money transactions) rather than income generation (as in the earlier
promotion of microfinance) as a crucial remedy for poverty alleviation. Such market-
inclusion discourses present poverty as an ill that is best countered by extending financial
services that ‘[make] poverty more manageable’ (Mader, 2016: 66). Mader points out
how this agenda returns to the community-based savings-and-loan associations left out
of earlier donor-driven microfinance schemes but also allows new actors to enter these
markets ‘who had previously not been seen at all as interested in the welfare of the poor,
such as payday lenders, large banks, technology firms, mobile network operators, and
credit card companies’ (ibid.: 64). Carroll (2012: 386) argues that such strategies of deep
marketization, by circumventing the state and introducing new actors, aim to provoke
changes both in the state by ‘forging new regulatory and risk-mitigating arrangements’
and in the private sector by, for instance, ‘promoting and assisting micro-finance NGOs
to transition towards becoming deposit-taking banks and commercial borrowers that do
not have to rely on traditional development modalities’ (ibid.: 398).
While these critical accounts of the inclusion agenda advocated by the World
Bank and other donor organizations have provided important insights, their critique
mostly takes the form of critical policy discourse analysis combined with macroeconomic
data analysis (see, for example, Carroll, 2012; Soederberg, 2013; Mader, 2017). Such
analysis lacks adequate accounts of how everyday life practices are affected by financial
logics. I argue that the complexities of the financial inclusion agenda in the housing
microfinance context become visible only by taking micropractices into account to
assess whether, how and to what extent financial logics are extended and deepened. In
this regard, the assisted self-help housing project discussed here is significant for the
persistence of its localized approach and the ethos of its work. These ensure that the
creation and expansion of markets for credit, building materials and professional services
GRUBBAUER962
that turn self-built homes into sites of accumulation are articulated with rationalities of
social and environmental justice. They also illustrate how ‘real markets emerge at the
crossroads of various logics that inscribe often contradictory organizational rules and
principles of worth’ (Berndt, 2015: 1871). If we fail to acknowledge these multiple logics,
we lose their potential for subversion and politicization. If we analyse financialization
from a macro perspective, and regard the political nature of finance only in structural
terms, we tend to overlook the ambivalence, contestation and subversion involved
in marketization processes that involve such extremely diverse actors, rationalities
and principles of worth. The central issue is then not the expansion of these markets
per se but whether, and at which point, the interests of business actors in finance and
construction prevail over the motives of social-sector actors, thereby securing not only
their accumulation activities but also their rule over these markets (Christophers, 2015)
and their ability to impose their own rationalities.
Conclusions
I conclude this article by placing my findings into a broader perspective. In
Latin American countries, housing programmes that combine savings, capital subsidies
and credits are well established (Gilbert, 2004). However, to date, they have mostly
been aimed at establishing homeownership and have thus largely failed to reach the
poorest segments of society (Bredenoord and Cabrera, 2014; Klink and Denaldi, 2014).
The market-based approach of the past years in Mexico is new in two ways: first, state-
provided upfront cash subsidies are combined with for-profit microfinance. Secondly,
schemes are meant to support ongoing improvement and remodelling of existing
homes rather than incentivize purchasing newly built housing produced by commercial
providers. Clearly, new financial actors have entered the market, eager to profit from
the SHF’s favourable refinancing conditions and to expand their client base beyond
mortgages or conventional microfinance. This leads to new forms of cooperation in
which financial rationalities of for-profit actors are negotiated and, potentially, subverted
by social-sector actors in control of the processes on the ground based on their face-to-
face interaction with and intimate knowledge of the livelihood practices of their clients.
The concepts of debt, risk and marketization allow us to highlight the
ambivalences in assessing such microfinance schemes. Such ambivalences result from
conflicting rationalities and operational logics of financial and social-sector actors.
However, while in stark contrast, the divergent rationalities can also be seen to generate
value: it is the involvement of intermediaries who do not follow financial logics that
is crucial for generating profit from the financial services offered. The rationales of
anonymous financial transactions are countered with trust that is built on personal
relationships with clients. Based on its ethos, the social enterprise supports clients
to handle unforeseen difficulties and to meet the requirements of the investor. The
localized approach guarantees control of processes and ensures that payments reach
the households and are used for the dedicated purposes. All of these aspects are crucial
in contexts where the poor have learned to distrust state institutions, where insecurity
is the norm, and where corruption is endemic. The paradox is that business actors will
strive for scaling up, yet their dependence on localized knowledge effectively inhibits
any form of standardization in housing solutions for such upgrading schemes. Any
attempt to scale up and streamline procedures inevitably involves reducing the quality
and impact of technical assistance and thus undermines those factors that potentially
contribute to profit generation.
The above differences between financial and social-sector actors are, in similar
ways, found in various fields of development undergoing increased marketization and
private-sector involvement. Yet, what makes these microloans for housing improvement
and remodelling distinct? This question prompts us to think more fundamentally about
the critical role of housing in capitalist societies, namely enabling capital circulation,
reproducing social inequalities and contributing to the reinforcement of capitalist

ideologies (Aalbers and Christophers, 2014).
First, when conceptualizing housing as ‘a “thing” produced by labour and sold
for profit’ (ibid.: 376), the self-built home in the Latin American context remains a
peculiar object. On the one hand, its commodification never turned out to be as total
as Burgess (1977; 1982) and other critics had envisioned. Construction and remodelling
are still primarily driven by prioritizing use-value for the households themselves. This
includes children and grandchildren of the first generation of builders, as the sharing
of lots with kin is common practice. The monetary value of these homes varies greatly,
depending on their location. However, as noted earlier, the self-built home is rarely
sold, and the lack of mobility among owners is striking (Ward et al., 2011; Ward, 2012).
On the other hand, self-builders’ dependence on industrialized construction materials
and globally circulated consumer goods has certainly increased (Klaufus, 2012). When
households take on loans to purchase materials, goods and labour, and to pay fees for
technical assistance, commodification of the self-built house is advanced in a twofold
manner: calculative practices weigh capital investment in the house against future needs,
potentially changing the owner-builder’s relation to the house; furthermore, payment of
interest rates leads to the appropriation of surplus value and links household incomes
to global financial circuits.
Secondly, when we consider how housing reproduces social relations and ‘serves
as a principal crucible for the exacerbation of multiply-constituted social inequality’
(Aalbers and Christophers, 2014: 383), the self-built home remains a site where
social reproduction and self-exploitation are intrinsically linked. While incremental
building processes serve the households’ changing needs, they are usually based on
the exploitation of labour. Low remuneration and low levels of efficiency can result in
the lowering of housing standards (Marcuse, 1992). The involvement of intermediaries
potentially counters some of these problems: it can facilitate redistribution by capturing
subsidies for the poor, make the building process more productive, increase efficiency
of material use, and allow the incorporation of professional expertise and learning
experiences from other projects. However, upgrading also serves to further normalize
routines of self-exploitation. Households become more committed to investing their
time and labour in the construction work, complying with project requirements and
paying off loans. Ultimately, upgrading a home serves to stabilize ownership patterns
and ‘lock in’ poor households in peripheries that are, particularly in the case of the
latest generation of self-built homes, highly disadvantageous. Drawbacks include
extreme distances from employment opportunities and commercial facilities, lack of
infrastructures, and persistent stigmatization.
Thirdly, if we consider how housing reproduces capitalist ideologies
through privileging ‘private property ownership, market allocation mechanisms and
accumulation strategies’ (Aalbers and Christophers, 2014: 384), the self-built home
exemplifies both the pitfalls and the instrumentality of ownership-centred housing
ideologies. The assisted self-help housing schemes discussed here are based on the
individualization of needs. Each household works for itself (although the financial
investor enables and supports clients to access collective loans). We know from various
studies that titling and regularization approaches that assume individual and exclusive
ownership are often in stark contrast to the complex ways collective ownership and
inheritance are negotiated in practice (Ward et al., 2011; van Gelder, 2013). This also
became visible in this case study. Yet, the loans granted serve not only to reinforce
property ownership as a political project––they also capitalize on the desires of
households to have a choice regarding building materials, design solutions, appliances
and furniture. This further normalizes credit-based consumption for everyday life
purposes, which is already very visible in Mexico. Thus, the home of the poor as a site
of capital accumulation for the construction, retail and finance sectors is enforced,
GRUBBAUER964
supported through massive subsidization that reduces risks for the for-profit financial
agents.
The wider relevance of these findings for debates about housing, development and
financialization can be summarized as follows. First, the evident blurring of boundaries
between the finance, construction and retail sectors deserves attention. Financial actors
enter strategic partnerships with other actors in housing and construction, especially
building-material producers and their networks of building-supply stores. This raises
questions as to how the building-supply chain and spectrum of intermediaries and
services are reconfigured to extract profits from low-income populations. Secondly,
the learning that occurs as business actors adopt methodologies of social-sector actors
is remarkable and necessitates further research. It can be placed within the wider
‘re-legitimising efforts within development practice’ (Carroll and Jarvis, 2015: 286) but
can also be seen as further normalizing poverty not as something to be resolved but to
be met with the right financial means and appropriate products. Thirdly, the opening up
of new circuits of capital as international development banks and institutional investors
target the housing microfinance sector is a crucial issue that must be considered. It
raises questions about shifts in power relations and new ways in which macro- and
micro-levels of financial activities are connected. Finally, it is important to note that
targeting the poor as clients of services related to housing provision is predicated on a
view of cities in developing states as sites of experimentation. The issues that emerge
are how this view reconfigures the (local) state, and what kind of broader socioeconomic,
institutional and regulatory restructuring occurs through housing policy experiments.
Monika Grubbauer, HafenCity University Hamburg, Überseeallee 16, 20457

Hamburg, Germany, monika.grubbauer@hcu-hamburg.de
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INTERNATIONAL JOURNAL OF URBAN AND REGIONAL RESEARCH 947

— ASSISTED SELF-HELP HOUSING IN MEXICO:

is expanding earlier microfinance schemes to push for private-sector-led development,

1 An Agencia Productora de Vivienda (APV) is a Mexican housing production agency.

Self-help housing, development and finance

Reflections on methodology and significance of the case study

The making of clients

50,000 INFONAVIT (Institute of the

FIGURE 1 Housing subsidies granted by CONAVI through various entities, 2007–2015

5 All quotations were translated from Spanish by the author.

The truth is that in Ecatepec I concentrate on functionality. This is very

The making of markets

rely on state institutions for providing ‘enabling environments’, even in contexts

TABLE 1 Number of credits granted according to type of intervention, 2015

Acquisition Improvement Self-production

source: CONAVI (nd)

needed for self-construction. The continuously rising levels of cement consumption

Ambivalent assessments: risk, debt and marketization

reproducing social inequalities and contributing to the reinforcement of capitalist

Monika Grubbauer, HafenCity University Hamburg, Überseeallee 16, 20457

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